WASHINGTON, D.C., May 5 -- The International Finance Corporation (IFC) has approved an equity investment in Maxima S.A. AFJP, which will provide private pension fund management and pension-related insurance services for Argentina's new pension system. Slated to go into effect on July 15, Argentina's integrated pension program will combine a new state-sponsored retirement plan with a new private plan. All workers over age 18 must contribute to either type of plan, but are free to choose which one. Most workers are expected to opt for the private system, which is expected to accumulate about US$3 billion in pension savings every year. "Given the large amount of funds available for investment, the new private pension system is likely to have a significant impact on Argentina's capital markets and private sector," according to Julio Lastres, Manager of the Capital Markets Division of IFC's Latin America and Caribbean Department. "It is also likely to provide Argentine workers with much better pension and insurance benefits than they have had in the past." IFC intends to acquire a 14 percent shareholding in Maxima and, in addition, a 14 percent shareholding in each of two insurance companies that will complement Maxima's operations: La Buenos Aires S.A. Vida, a new life insurance company that will provide mandatory pre-retirement life and disability insurance for AFJP affiliates; and La Buenos Aires S.A. Retiro, a retirement insurance company that will sell annuities to workers on retirement and to life and disability insurance beneficiaries. The sponsors of Maxima S.A. AFJP and the pension-related insurance companies will include Banco Roberts, La Buenos Aires Seguros, Banco Quilmes, and Deutsche Bank Argentina, the local subsidiary of Deutsche Bank in Germany. IFC is a member of the World Bank Group and is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
